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To: Michael G. Potter who wrote (5966)	8/3/1998 1:35:00 PM
From: Harold Engstrom	Respond to of 16960

Not only has there been nothing showing the TNT outclassing Banshee, but it is clear that the opposite is true. The benchmarks show Banshee outclasses TNT in 3D. And there is no contest when it comes to 2D. Flat earnings is pretty great when your stock is selling at $14 and you make $0.54 per share in the slow time of the year. And when you're fabless, your earnings go to cash and not into a big building that you need to write off in 3 years. As far a pricing goes, the card vendors will set the prices and those TNT board prices will drop like a stone until they become more attractive vs. Banshee - bottom line: people will buy the quality components and price will not be the issue. As far as OEM accounts go, the Banshee chip is less expensive than TNT and is the logical choice for PC OEMs to include in their machines through a deal with Creative or Diamond or whoever.

To: Michael G. Potter who wrote (5966)	8/3/1998 1:59:00 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 16960

OFF TOPIC -- A walk in the woods Every month I run various computer screens to get the pulse of the market. I stopped doing this about 3 months ago (what a mistake!) due to work pressure, so this weekend I spent sometime running my overdue benchmarks. The results showed some nasty currents in the market. For the description of the stock universe in the test see note (1) at the bottom of the page. For a description of why this may be useful see note (2). If you've been loosing a load of money during the past 3 months (say more than 20%), you are one of the majority, despite the contradicting view from S&P500 index. If you were a "value" investor, then you really got creamed last quarter regardless of what you owned. Here is why: Major Indecies 13wk return. Best Performing: Morgan Stanley Europe (6.76%) and Russel 1000 Growth (4.57%) Worst Performing: Russel 2000 (-10.6%) and Russel 1000 Value (-0.75%) ST3000 (Sun Tzu's 3000 stock universe :D) See note 1 MEAN P/E=33.8, P/S=3.37, Net Marg.=6.27%, 13wk ret. = -7.7% Stocks 10% or more below their highs (where most pros get worried) = 87% Stocks 20% or more below their highs (traditional bear market) = 56.5% Stocks 33% or more below their highs = 32% (Oooch!) As bad as these are, they get much worse if you were a value investor. For the 640 stocks in the above universe with the most attarctive valuations (i.e those with PE < 20 vs 33.8, PS < 2 vs 3.4, PB < 5, and Op. Marg. > 15%) the results were disastrous: Mean PE = Av. Anual PE = 13.6, Op. Marg. = 25, Market Cap = 2B, 13wk ret.= -14% (what a disappointment for such good companies) two thirds had returns of -20% or worse, the Meidan was -27% and one third had returns of -37% or worse! And I thought they had outlawed bear markets :( You would have been a somewhat better off if you had been a growth investor, but even so you would have most likely shown a loss for the quarter, unless you were invested in the biggest 2% companies or in the internet stocks. In fact, my research showed that you probably would have lost money in any well diversified portfolio, and the more your portfolio was "reasonable" by whatever measures (value, growth, momentum, ...) the more you would have lost. This has been (still is?) a traders' market and not an investors market. I will provide more detail on this if there is an interest. =================== Jeff Great Job! if trial members are allowed to vote, you have mine for a free membership. =================== Mike S. I never took journalism, that post should have read double minor in Economics and Philosophy. Sun Tzu Notes (1) The ST3000 is my personal set of 3000 stocks which excludes the very high (top 2%) and the very low (bottom 18%) market caps right now this is MC = [$53M, $24B]. It also excludes any company which has not been around for more than 3 years (and is thus unknown/unproven). (2) I use the above universe as a baseline to do factor analysis on the top 15% performers during the last quarter to find out the current pulse of the market and what it is willing to pay for. If you've read any of James O'Shaunessy's (sp?) books you know what I am talking about. To do this properly though is a lot more complecated than what you read in his books. I marry this factor analysis with technical quantitative analysis for the market (I've only found reliable data as far back as 1985 so this is not as good as it should be) to come up with a list of stocks to go long/short as a hedge pair. Some had concluded that by calling "long term" investment over rated, I've been a terrible long term investor. In reality my best wins came from holdings of over two years. I've found however that using the above approach combined with use of derivatives I can (theoretically) make 67% return a quarter while taking much less market risk. The actual results have not been as good as the above 770% annual return, but they have been much better than the overall market.